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China's economic crisis similar to Japan in 1990s

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China's economic crisis similar to Japan in 1990s

Not at all. It's just a normal slowdown.

-2 ( +3 / -5 )

This is far from a normal 'slowdown'. This is just the tip of the iceberg.

3 ( +5 / -2 )

"Both economies were.....liberalising their financial sectors."

Exactly! Once you "liberalize" your financial sector, then expect doom, terror and full-out destruction. China's advantage is the state's huge and active stake, especially in the banks, which shielded it from the 2008 crisis.

Rounding up the fraudster billionaires and sending them to jail for long periods (which the US and Japan didn't do) is part of a strong defense.

2 ( +4 / -2 )

Good article, writer is correct that China today is just a replay of Japan 25 years ago. The mechanics of credit bubbles and credit expansion economic "growth" are exactly the same in both cases. Question now is whether the Chinese government will handle the situation correctly, or if like Japan, they waste 25 years in "free market" neo-liberal fantasy land and rescue their banks and not their economy.

2 ( +5 / -3 )

This is just the tip of the iceberg.

This is only your wishful thinking. China wasn't forced in something like the Plaza Accord, it has full sovereignty. No matter how much some countries can dislike the idea, but China will be the first worldwide economy in the near future. The comparison between China and Japan is completely idiotic on so many levels. China has a huge population, a huge territory, tons of natural resources. It shares with Japan only the export-oriented model and the education system, that inspired China and other Asian countries, despite they apparently deny any influences from Japan's successes because of national pride.

0 ( +2 / -2 )

All bubbles pop the same way, and pretty much have the same shape.

And studies show all bubbles, going back 500 years have ONE thing in common:

Bunch of extra money (real fake or from somewhere else) entering the economy.

And every single time they pop, everybody says, "Well, this time it's different!"

3 ( +3 / -0 )

Like I have been saying for years China is like a fire cracker, only question is explode, implode or BOTH!

Will the commies be able to keep their people in check............under their THUMB!

-2 ( +1 / -3 )

Like I have been saying for years China is like a fire cracker, only question is explode, implode or BOTH!

The only super-power that is actually collapsing, but it doesn't want to admit its decline, is the US. For this they are engaging so many hopeless wars.

-1 ( +2 / -3 )

On the surface, it looks similar to Japan's situation back then, but there are key differences. China holds a massive amount of U.S. debt, mostly in the form of bonds. There's the currency wars, with the devaluation of the RMB affecting the petro-dollar, the political and economic effect of China aligning with Russia and BRICS countries, political tensions between China and U.S., etc. When China's economy continues its slide down and it's time to collect on that debt, the impact of this on the U.S.' and other economies would be catastrophic.

This is just the tip of the iceberg.

0 ( +2 / -2 )

Yup, this like Japan 1990, but it could get worse.

0 ( +1 / -1 )

The only super-power that is actually collapsing, but it doesn't want to admit its decline, is the US. For this they are engaging so many hopeless wars

Alex LOL. Now you have officially made reading your posts simply a waste of time -- nothing but a broken record. Even an article about the similarities of China's market crisis to Japan's -- and there are many, as opposed to what you state -- is an excuse for an anti-U.S. rant. But, just for the record, please name all the "so many hopeless wars" Obama has engaged in? Fact is, Obama has withdrawn the U.S. from both Iraq and, for all intents and purposes, from Afghanistan as well. And, if you really followed the U.S., you would know that we are closing bases, and rapidly shrinking the size of the military, especially the army.

Good article, writer is correct that China today is just a replay of Japan 25 years ago

Guy, for once we agree. Good post.

-5 ( +0 / -5 )

Now you have officially made reading your posts simply a waste of time

Nobody forces you to read them, fortunately. :)

2 ( +3 / -1 )

One difference between China and Japan is that China is a powder-keg of different cultures and ethnic groups that have been suppressed for decades. A declining economy may be just the match ...

-2 ( +0 / -2 )

Nobody forces you to read them, fortunately. :)

Tahnks for the tip. I'll just mark them with a "thumbs down", unread, in the future and move along.

-3 ( +1 / -4 )

Once you "liberalize" your financial sector, then expect doom, terror and full-out destruction.

Japan's liberalization included permitting residents of Japan to hold foreign currency, and allowing different financial service providers to decide what fees they charge for their services.

Lordy lordy, what havoc such liberalization has caused...

if like Japan, they waste 25 years in "free market" neo-liberal fantasy land

If only Japan had had free markets (Never heard of the TPP?)

If the Chinese government spends the next 25 years by enacting government "stimulus" packages, then it will end up like Japan, or worse. I don't think the Chinese are as incredibly stupid as that.

-1 ( +0 / -1 )

It's too early; time will tell what this leads to. But the end-of-the-week upturn in the US markets going against the grain may have stemmed the downward tide in Asia somewhat.

Though keep in mind economics are in cycles; nothing grows forever without a correction.

0 ( +0 / -0 )

I agree with Alex that the 2 cases are not at all similar.

Japan's economy crashed as a result of a sudden reduction of the money supply as the general public was pressuring the govt and BOJ to take steps to mitigate increasing disparity between the haves and have-nots.

China's recent stock market crash came as a result of diverting funds from the faltering real estate bubble into the stock market in an attempt to create another bubble, but things didn't play out as they planned it.

0 ( +0 / -0 )

"Japan's economy crashed as a result of a sudden reduction of the money supply as the general public was pressuring the govt and BOJ to take steps to mitigate increasing disparity between the haves and have-nots."

Lordy, that's quite an "interesting" analysis. LOL.

The MS had in fact rocketed up during the bubble in tandem with the rapid credit expansion. And it continued to shoot up even after monetary policy was tightened.

MS decelerated as symptom -- not the cause -- of the the meltdown, and it was due to the banks getting cold feet and shutting their doors to customers.

Nothing to do with "disparity." Indeed. the financial disaster was another case of a rich powerful elites in the private sector (bankers and land owners) getting too greedy, and the state letting them get away with it.

-1 ( +0 / -1 )

Takahashi Youichi, Nishimura Yoshimasa and Tanaka Hideomi (in case you don't know, all prominent Japanese econimists - and these are just a few of the more famous ones) argue that the banks got cold feet as a result of BoJ rightening monetary policy and the real estate regulations (Souryou Kisei)

If you had been in Japan at the time, you would've seen that the public was mobilized to pressure these actions from the BoJ and MoF through reporting on "Tochikorogashi" and similar reports about disparity.

Couldn't care less if you disagree but its not an uncommon analysis at all.

-2 ( +0 / -2 )

Besides its enormous Forex reserves, China has plenty of accumulated assets world wide, and not forgetting China holds the highest Gold reserves estimated to be well over 15,000 tons (officially declared as 1685 tons). The current bearish trend is like many said an adjustment to real market values - and the biggest culprit are the big manipulators who triggered most of the speculations that recently created a bubble. These people are now banned and under investigation.

-1 ( +0 / -1 )

Government investigating people because the stock market crashed.... you believe that Johnny?

0 ( +0 / -0 )

For some months past, a news about worry in global economy is pouring in. Question is : of the hundred and odd countries of this world, name countries whose economy is doing very well from May 2015 and after. May not be more than one or two. Here is the answer. This Vedic astrology writer had , as early as last year on 2 June 2014, predicted that global economy is likely to have stressful time from November 2014 to about mid -2016. Keeping in view the indications of varying degree of likely stress during the said predicted time, three divisions were highlighted as follows : (1). Global economy would likely to pass through a mild slowdown from November 2014 to about April 2015. (2). The stress may be intense during May 2015 to October 2015. It was said that : “ discernible concerns would surface. Definite rumbles of distress would be heard”. (3). The stress may likely be much more intense than earlier if not critical during November 2015 to about mid- 2016. Briefly speaking, natural calamities , energy resources including oil and erroneous decisions of the rulers may be some of major causes. These predictions were made in article – Stressful times ahead for world economy in 2015 and 2016- published online at astrologyweekly.com. It may however, be observed here that astrological predictions made sufficiently in advance are indicative of likely trends or environment and are not synonymous with determinism because an appropriate and sufficient strategy has a potential to either reduce the gravity of outcome or in some cases may even frustrate outcome of such impacts. That could be usefulness.

0 ( +0 / -0 )

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